Tag Archives: public service reform

How do we build markets when customers don’t pay?

Despite its popularity with politicians (or perhaps partly because of it) public service marketization is rarely discussed in a practical useful way…. ” – the first in a new monthly series of blogs I’m writing for Pioneers Post on social innovation and public service reform. Next two are on: ‘Who pays when the state can’t?’ and ‘Do all public services have to be delivered by professionals?’


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Trade unions and the social enterprise movement – (hopefully) things can only get better

As we prepare ourselves for a pretty nasty couple of months, followed by a challenging couple of years (at least), it’s a good time to examine some of the big challenges the social enterprise movement and social enterprises face in navigating a path through the storms ahead.

When it comes to a potentially increase in the role of social enterprise in delivering public services, there’s a clear need for the social enterprise movement and the trade union movement to develop a more positive working relationship. While some social enterprise employers engage positvely with unions representing their workers, at the level of policy rhetoric the relationship could hardly get much worse.

To take some examples, leading social entrepreneur Craig Dearden-Phillips, of spin-out specialists, Stepping Out, isn’t keen on unions’ general attitude to public service reform. His charge against unions is: “you have, over time, morphed into from your better beginnings – as defenders of preferential terms and conditions for your members, regardless of how unsustainable these are and how much they cost the ordinary taxpayer.”

As a desirable alternative approach from the brothers and sisters, Craig proposes that we: “Look at Germany where the unions sit on boards. That’s what we need. Sharing, diversity and responsibility. A place at the table. A shared interest in the running of businesses. For me this is what social enterprise is about.

Wielding the water-pistol of rhetorical ire most prominently from the other side of the fence is Unite the Union (other unions, such as Unison, have similar starting points but often communicate their positions with slightly more subtlety). Unite’s approach to social enterprise is epitomised by this piece in September’s Social Enterprise magazine from assistant general secretary, Gail Cartmail, who informs readers that:“The centre piece of this privatisation agenda is ‘social enterprise’ – warm words disguising an open sesame to private companies wishing to grab more lucrative NHS contracts. This will be mirrored across government with local authorities and education also in the frame for this ‘liberation’.

This is followed by the assertion that: “Unite’s experience is that in the NHS a few managers tend to push for social enterprises with only the most cursory consultation – but when staff are consulted there is a massive rejection of the social enterprise concept.” and, after some points about why privatisation is generally a bad thing, we’re hit with the, er, clincher:

“Social enterprises, being one step removed from the NHS, will erode pay and pensions of staff, making it difficult for the NHS to recruit and retain staff.”

We can only assume that the Unite press officer who drafted this article for Ms. Cartmail had for some reason not received the briefing note explaining that Social Enterprise is a magazine primarily read by people who (at least think they) know what social enterprise is and have chosen to work in the social enterprise sector. Call me an evil, scheming Alastair Campbell-clone but I’m not too sure you’ll win many social entrepreneurs over to the cause of workers rights by implying they’re nothing but dupes for a right-wing privatisation agenda.

Unite have a history of run-ins with social enterprises. While I (apparently controversially) don’t accept that they should duck confrontation with employers simply because those employers are a social enterprise, I also wonder if they’ve fully considered some of the possible alternatives to their current unremitting antipathy.

One thing that most trade unions and most social enterprises in the UK share is being fundamentally pragmatic in their approach to social action. Despite a few famous exceptions, most unions in the UK have always been (and are now) committed to getting the best deal and provided the best possible protection for their members in any given set of circumstances. And most social entrepreneurs use whatever resources, skills and support they can muster to bring about as much positive change as they can for the people they’re trying to help (usually including workers).

When it comes to the current debates about public sector spin-outs, the big mistake on the social enterprise side is to avoid considering the possibility that replacing a publicly-delivered service with a social enterprise won’t necessarily be a good thing for the workforce of that service, and to completely ignore the possibility that this may be the case even if the new social enterprise actually provides a better service.  Neither of these points – particularly not the second one – is necessarily a reason for social entrepreneurs to stop trying to create spin outs but they’re vitally important points to be aware of.

People who work for large social enterprises doing normal jobs are signing up to a very different package to people who set up an exciting social enterprise web businesses with their maters. Why should they be expected to accept a worse deal on pay and conditions, or a higher risk of redundancy, than public sector counterparts just because wider society (in theory) gets positive social impacts as a result?

On the union side, the big mistake is to fail to see that genuine social enterprises*, working productively in partnership with unions, might be the best option on the table for their members. Even if their starting point is that publicly-delivered services are the preferred option, the Unite line – which apparently fails to draw a significant distinction between successful social enterprises like HCT and corporate outsourcing specialists like SERCO – is counter-productive because it leave no scope for unions and social enterprises to work together to offer an alternative to full scale privatisations (even in instances where these are the only two likely options).

As we enter this period of public sector upheaval, there’s a major need to move beyond ‘unions are dinosaurs’ and ‘social enterprise is privatisation’ to a position where both sides understand each other’s positions better, and accept that – while there will be many instances where the interests of trade unions members and social entrepreneurs won’t be exactly the same – there will be plenty of times where both sides (and the people they serve) will benefit from working together.


*My liberal views on definitions of social enterprises are well-documented but the use of ‘genuine’ in this instance is a reference to the view held by some current government politicians that the term ‘social enterprise’ can be used to refer to conventional businesses operating in the field of public service delivery but with no aspirations to deliver wider social goals beyond contract stipulations.


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Social enterprise somehow replacing the state

Barely a week passes without one politician or another reeling off (generally through the medium of a junior press officer) a statement about how The Big Issue and The Eden Project demonstrate how social enterprise will solve all the problems faced by the NHS. Care Services Minister, Paul Burstow is the latest to do so, probably delighting (amongst others) residents of Bristol with the news that their PCT’s community health service will be turned into a magazine and sold to them by the homeless.

Compared to much of the political rhetoric around social enterprise and public services, this article in the Daily Telegraph by Julie Meyer (of the online version of Dragons Den) is relatively sensible. She discusses the work of socially useful businesses (there will be a variety of views on which of them are social enterprises) and uses their success as the basis for the argument that:

“The role of government in solving society’s problems decreases as social entrepreneurs, capitalists and industrialists arrive. Government can thus focus on restoring its own balance sheet and undertaking those things that only governments can do, such as providing safe cities and international security.”

The problem is that the gap between the good things that these businesses do – making it easier for people to donate to charity online, providing medical information for children, offering micro-finance to young people who want to start businesses – and the basic functions of catching criminals and defending the borders is a big one. So big that it’s currently filled with more or less everything that the UK government does.

There’s lots of interesting ongoing discussion about the extent to which the state should or shouldn’t be involved in the direct provision of all the services that current fit into that gap – including education, healthcare, social care, firefighting, pensions, public transport and infrastructure, pensions, welfare benefits (including back to work services), sweeping the streets, collecting the rubbish etc. – but as yet very few credible suggestions about how anyone other than the state might actually pay for it.

Many of us in the social enterprise movement are instinctively sympathetic to Julie Meyer’s suggestion that ordinary citizens should get involved in reforming society and that we should all be looking at how we can tackle social problems without continually demanding that the government do something about it. Whether or not the Daily Telegraph is their paper of choice in terms of its politics, many social entrepreneurs feel that a situation where the state continues to assume (often by default) ever growing responsibilities which it doesn’t have the resources to discharge effectively both disempowers people and sets the state up to fail.

But the social businesses currently being highlighted – from the corridors of power to the pages of the Telegraph – are not directly relevant to solving that problem. They do not and cannot – on a national scale or on a commercial basis – offer the social safety net that some want, let alone the active, enabling society that many others prefer.

Given that, irrespective of any of our political views on the matters, the UK state is going to shrink significantly over the next five years, it’s important for the social enterprise movement to consider whether it really does have any commercially viable and social positive ideas for replacing some of the public service that will disappear. Otherwise we aren’t looking at a hole in provision filled by social enterprise or the Big Society, we’re just looking at a big hole.


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